TNAG-2259-FCO40-3255-Hong-Kong-Port-and-Airport-Development-Strategy-(PADS)-Brit-1991 — Page 142

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Mr. Malwyn Jones' PA

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this on 22/10

(7/10)

CONFIDENTIAL

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INDEX

Cd: Mr Ricketts,

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"Mr Furness

BALFOUR BEATTY: HONG KONG AND CHINA

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15/10

I was grateful for your advice on what to say to Sir Dennis Walters MP when I spoke to him on the telephone this morning about the Prime Minister's visit to China and Hong Kong. It turned out that his interest was indeed on behalf of Balfour Beatty, not BAe. But his concern was about Hong Kong, not China.

2. He said that Balfour Beatty were interested in bidding for the airport platform project and were in touch with CITIC, but were unclear whether HMG were in favour of a British company entering into a joint venture with China in this way.

3. I said to him that we knew that Balfour Beatty were very active in the Far East. Indeed, although we would not be bruting this around, their interest in the Canton metro had been clearly signalled to the Chinese during the Prime Minister's visit (although the discussion on the whole had been of a general kind, about areas of interest rather than entering into the fine print).

4. As far as the Hong Kong airport platform was concerned, I believed that the tenders would be sought shortly. The Hong Kong Government had given companies an opportunity over the summer to rejig their participation if they wished. This had not been explicitly designed to encourage them to involve Chinese partners: that was a matter for the companies. But, given the long delay over the airport negotiations, it was only sensible to allow companies the opportunity to think again of the precise partnership arrangements they would want to enter into. HMG, as such, had no view about whether it was better for British companies to have a Chinese partner. The tendering arrangements were entirely in the hands of the Hong Kong Government and the test would be competitiveness, quality control and reliability. We could see strong advantages in British companies having a Chinese partner, particularly on a project like the airport platform, where good communications with China would clearly be a distinct advantage. But the playing field was level and not tipped either towards the Chinese or the British. I added that

A31AAF/1

CONFIDENTIAL